10 Human Rights Priorities for the Financial Sector

Human rights are inherent to all human beings. They are defined and established in more than 80 international legal instruments1 and define the fundamental protections of human dignity, needs, and freedoms, such as food, housing, privacy, personal security, and democratic participation.

In 2011, the UN Human Rights Council unanimously endorsed the UN Guiding Principles on Business and Human Rights, the first international instrument to assign companies the responsibility to respect human rights.

Since the adoption of the Universal Declaration of Human Rights (UDHR) in 1948, the responsibility to protect human rights has primarily fallen on governments. Beginning in the early 2000s, however, it became increasingly clear that the freedoms enshrined in the framework could also be violated—and promoted—by the private sector.

In 2011, the UN Human Rights Council unanimously endorsed the UN Guiding Principles on Business and Human Rights (Guiding Principles), the first international instrument to assign companies the responsibility to respect human rights. The Guiding Principles state that governments must put in place good policies, laws, and enforcement measures to prevent companies from violating rights; that companies must refrain from negatively impacting rights even when governments are failing to create or enforce necessary laws; and that victims of corporate abuses must have access to effective remedy. As part of this responsibility, the Guiding Principles require companies to undertake due diligence to identify and manage their negative human rights impacts.

The financial sector comprises a wide range of businesses and activities, from asset owners and managers to private equity, venture capital, and commercial banking. While each of these sub-sectors will have its own human rights profile and challenges, this brief highlights universal risks for companies operating in finance.

Top 10 Human Rights Risks for the Financial Sector

1. Discrimination in Lending Practices

Lending practices contain human rights risks regardless of their size or scale. As seen in the subprime mortgage crisis, individual brokers may target minority borrowers for loans they are unlikely to afford in the long term. Similarly, entire lending institutions may deny customers access to finance based on race, religion, or gender.2 As loans are increasingly approved or denied by algorithms, financial models have the potential to perpetuate, exacerbate, or mask discrimination.3

2. Customer Due Diligence

All financial institutions, large and small, should engage in environmental, social, and governance due diligence before issuing loans. Whether dealing with an individual client, a small business, a multinational enterprise, or a government entity, the Guiding Principles clearly state that companies must examine all their relationships—including those with their customers—for potential human rights impacts. Lending to customers without first examining their social and environmental records may result in the facilitation of gross human rights violations. This may manifest as financing governments that abuse their citizens or accelerating the growth of a company that exploits its workers.

3. Sector Due Diligence

Beyond customer due diligence, financial sector companies should conduct sector due diligence to ensure that their investments in companies, infrastructure projects, or other entities do not contribute to human rights violations. Sector due diligence should consider operation-specific impacts—such as a mining project that displaces local residents—as well as the geographic context in which the investment will take place. The potential impacts of failing to conduct sector due diligence are as wide ranging as those outlined in risk 2.

4. Bribery and Corruption

Corruption is pervasive in large-scale projects that seek outside funding, especially those taking place in autocratic countries, carried out by state-owned enterprises, or overseen by politically connected individuals.4 Corruption and bribery profoundly affect vulnerable communities—either by misdirecting funds that could be spent on healthcare, education, or other public goods, or by preventing participation in the democratic process. Financial sector firms should ensure that any engagement in high-corruption contexts proceed according to international norms of transparency and accountability.

5. Large-Scale Infrastructure and Land Developments

Project finance requires robust due diligence on issues involving land rights, displacement, and forced relocations, particularly in countries where access to remedy for these violations is curtailed or nonexistent. In contexts with a high risk for corruption and weak rule of law, companies should ensure that infrastructure projects are built only under strict adherence to international norms regarding consultation, compensation, and population relocation.

6. Commodities Investing

Trading and investing in commodities, particularly staple foods or other agricultural products, can drastically affect the price of food, water, and healthcare, and could restrict land use or other natural resources for vulnerable populations. While these impacts may at first glance appear to be beyond the scope of financial sector due diligence, the distorting effects of commodity purchases can be profound, and the businesses behind them should consider collective responsibility for mitigation.5

7. Customer and Employee Privacy

Data breaches and misuse of customer or employee information may result in human rights violations, particularly if sensitive financial information is disclosed. Companies must ensure that all collected data is protected through regular security upgrades and adequate employee training. Arbitrary interference with privacy is considered a human rights violation, and the proper collection and handling of such data is firmly within a company’s direct responsibilities under the Guiding Principles.

8. Supply Chains and Modern Slavery/Human Trafficking

All businesses that procure products or services are at risk of contributing to forced labor and human trafficking in their supply chains. Regardless of the scope of a company’s procurement, it is crucial to conduct supply chain mapping to identify the greatest risks, investigate compliance with local laws, and, where possible, remediate violations. While a company cannot be responsible for all working conditions in all suppliers, it is important to identify the most severe violations and take action to prevent them.

9. Equal Pay

In the United States, three of the five occupations with the widest gender wage gaps are in the financial services sector.6 Financial institutions should conduct an internal study to ensure that their employees receive equal pay for equal work and remediate if inequalities are found.

10. Discrimination

The financial sector has historically been a male-dominated industry. Beyond the gender wage gap, financial institutions have also discriminated against other minority groups in hiring, promotion, and workplace cultural practices. While significant strides have been made to address these issues—especially in developed markets—it remains a significant concern. Financial institutions should address these issues directly through policies, procedures, and trainings related to workplace discrimination and sexual harassment, and should monitor and engage their workforce to prevent discriminatory practices.

Top 3 Opportunities for Positive Impact

1: Prioritizing Positive Infrastructure Projects

The most important and impactful way financial sector companies can contribute to development is by incorporating it into their core operations. Financiers can work with governments, developers, and civil society to prioritize large-scale infrastructure projects that provide the greatest public good, especially for the most vulnerable. This may include sanitation and water purification projects or road and highway development for rural communities, hospitals, or schools. Ensuring access to these basic resources is an opportunity particularly well suited to the financial sector.

2: Empowering Underserved Demographics

Companies can create unlimited opportunities for economic growth through mobile-to-mobile banking, lending, and financing for populations that lack access to finance, particularly rural communities in developing countries. Programs that promote financial inclusion and financial literacy, such as BSR’s HERfinance, allow companies to contribute to the development of banking infrastructure and the empowerment of communities to use that infrastructure for investment and growth. As these programs continue to proliferate around the world, the opportunities for commercial banks and other lending institutions to contribute will only expand.

3: Socially Responsible Investing

Many banks maintain funds whose investment principles consider social and environmental impacts. The principles upon which these types of investments are based can be expanded across all investment due diligence.

Industry Focus

Financial services companies play a unique role in corporate responsibility and sustainability: They must address their own corporate responsibility, and they must invest in and serve clients in ways that promote sustainable, ethical, and responsible growth across the entire economy.

Equator Principles
The Equator Principles are a risk management framework for determining, assessing, and managing environmental and social risk. It has been adopted by 87 financial institutions in 36 countries.

Universal Declaration of Human Rights

Article 1

Universal Declaration of Human Rights

Article 2

Everyone is entitled to all the rights and freedoms set forth in this Declaration, without distinction of any kind, such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status. Furthermore, no distinction shall be made on the basis of the political, jurisdictional or international status of the country or territory to which a person belongs, whether it be independent, trust, non-self-governing or under any other limitation of sovereignty.

Universal Declaration of Human Rights

Article 2

Everyone is entitled to all the rights and freedoms set forth in this Declaration, without distinction of any kind, such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status. Furthermore, no distinction shall be made on the basis of the political, jurisdictional or international status of the country or territory to which a person belongs, whether it be independent, trust, non-self-governing or under any other limitation of sovereignty.

Universal Declaration of Human Rights

Article 2

Everyone is entitled to all the rights and freedoms set forth in this Declaration, without distinction of any kind, such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status. Furthermore, no distinction shall be made on the basis of the political, jurisdictional or international status of the country or territory to which a person belongs, whether it be independent, trust, non-self-governing or under any other limitation of sovereignty.

Universal Declaration of Human Rights

Article 6

Universal Declaration of Human Rights

Article 7

All are equal before the law and are entitled without any discrimination to equal protection of the law. All are entitled to equal protection against any discrimination in violation of this Declaration and against any incitement to such discrimination.

Universal Declaration of Human Rights

Article 11

Everyone charged with a penal offence has the right to be presumed innocent until proved guilty according to law in a public trial at which he has had all the guarantees necessary for his defence.

No one shall be held guilty of any penal offence on account of any act or omission which did not constitute a penal offence, under national or international law, at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the penal offence was committed.

Universal Declaration of Human Rights

Article 12

No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation. Everyone has the right to the protection of the law against such interference or attacks.

Universal Declaration of Human Rights

Article 15

Universal Declaration of Human Rights

Article 16

Men and women of full age, without any limitation due to race, nationality or religion, have the right to marry and to found a family. They are entitled to equal rights as to marriage, during marriage and at its dissolution.

Marriage shall be entered into only with the free and full consent of the intending spouses.

The family is the natural and fundamental group unit of society and is entitled to protection by society and the State.

Universal Declaration of Human Rights

Article 17

Universal Declaration of Human Rights

Article 18

Everyone has the right to freedom of thought, conscience and religion; this right includes freedom to change his religion or belief, and freedom, either alone or in community with others and in public or private, to manifest his religion or belief in teaching, practice, worship and observance.

Universal Declaration of Human Rights

Article 19

Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers.

Universal Declaration of Human Rights

Article 20

Universal Declaration of Human Rights

Article 21

Everyone has the right to take part in the government of his country, directly or through freely chosen representatives.

Everyone has the right of equal access to public service in his country.

The will of the people shall be the basis of the authority of government; this will shall be expressed in periodic and genuine elections which shall be by universal and equal suffrage and shall be held by secret vote or by equivalent free voting procedures.

Universal Declaration of Human Rights

Article 22

Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality.

Universal Declaration of Human Rights

Article 23

Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.

Everyone, without any discrimination, has the right to equal pay for equal work.

Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.

Everyone has the right to form and to join trade unions for the protection of his interests.

Universal Declaration of Human Rights

Article 23

Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.

Everyone, without any discrimination, has the right to equal pay for equal work.

Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.

Everyone has the right to form and to join trade unions for the protection of his interests.

Universal Declaration of Human Rights

Article 24

Universal Declaration of Human Rights

Article 25

Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection.

Universal Declaration of Human Rights

Article 25

Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection.

Universal Declaration of Human Rights

Article 26

Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit.

Education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms. It shall promote understanding, tolerance and friendship among all nations, racial or religious groups, and shall further the activities of the United Nations for the maintenance of peace.

Parents have a prior right to choose the kind of education that shall be given to their children.

Universal Declaration of Human Rights

Article 28

Universal Declaration of Human Rights

Article 29

Everyone has duties to the community in which alone the free and full development of his personality is possible.

In the exercise of his rights and freedoms, everyone shall be subject only to such limitations as are determined by law solely for the purpose of securing due recognition and respect for the rights and freedoms of others and of meeting the just requirements of morality, public order and the general welfare in a democratic society.

These rights and freedoms may in no case be exercised contrary to the purposes and principles of the United Nations.

Universal Declaration of Human Rights

Article 30

Nothing in this Declaration may be interpreted as implying for any State, group or person any right to engage in any activity or to perform any act aimed at the destruction of any of the rights and freedoms set forth herein.

Including, notably, the Universal Declaration of Human Rights (UDHR), the International Covenant on Civil and Political Rights (ICCPR), the International Covenant on Economic, Social and Cultural Rights (ICESCR), and International Labour Organization (ILO) fundamental conventions. Learn more

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